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Thursday, July 25, 2013

US charges six in biggest credit card hack on record

Five Russians and a Ukrainian face federal criminal charges
of hacking into the computers of major payment processors, retailers and
financial institutions, stealing more than 160 million credit card numbers and
causing hundreds of millions of dollars in losses.

It is the largest such scheme ever prosecuted in the United
States, federal authorities said in unsealing indictments Thursday in Newark,
N.J., and Manhattan.

Victimized firms ranged from 7-Eleven, Wet Seal and JetBlue
to Visa Jordan, Diners Singapore and the Nasdaq stock market, authorities said.
Three corporate victims alone lost more than $300 million, and the alleged
scheme caused “immeasurable losses to the identity theft victims in costs
associated with stolen identities and false charges,” authorities in New Jersey
said.

“This type of crime is the cutting edge,” Paul J. Fishman,
the U.S. attorney for New Jersey, said ijn a news release. “These types of
frauds increase the costs of doing business for every American consumer, every
day.”

Mythili Raman, acting assistant attorney general of the
Justice Department's criminal division, said: "Today’s indictment will no
doubt serve as a serious warning to those who would utilize illegal and
fraudulent means to steal sensitive information online.”

According to a second
superseding indictment in Newark federal court and other court filings, the
five men each served particular roles in the scheme.

Vladimir Drinkman, 32, of Syktyykar, Russia, and Moscow, and
Alexandr Kalinin, 26, of St. Petersburg, are accused of hacking into the
computer systems, while Roman Kotov, 32, of Moscow allegedly mined the
compromised networks to steal valuable data.

The defendants allegedly hid their activities using
anonymous web-hosting services provided by Mikhail Rytikov, 26, of Odessa,
Ukraine. Dmitriy Smilianets, 29, of Moscow allegedly sold the information
stolen by the other conspirators and distributed the proceeds of the scheme to
the participants.

Authorities said Kalinin
and Drinkman were previously charged in New Jersey as “Hacker 1” and “Hacker 2”
in a 2009 data breach case, described at the time as the largest ever. Albert
Gonzalez, 32, of Miami was sentenced to 20 years in federal prison for his role
in those offenses.

The government said Drinkman and Smilianets were arrested in
the Netherlands on June 28, 2012. Their attorneys could not be immediately
reached for comment. Kalinin, Kotov and Rytikov remain at large.

In separate indictments unsealed in Manhattan, Kallinin and
another Russian, Nikolay Nazenkov, were accused of hacking U.S. financial
institutions and using stolen information to withdraw millions of dollars from
victims’ accounts. U.S. Atty. Preet Bharara said the targets included Citibank,
PNC Bank and Nasdaq. Nasdaq’s trading platforms were not compromised, the
government said.